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While at Kissinger Associates, Eagleburger served on the board of the Yugoslav-owned LBS Bank, which was convicted of money laundering in 1988. About one-quarter of its business came from Banca Nazionale del Lavoro, whose Atlanta branch was instrumental in diverting U.S. agricultural loans to arms purchases by Saddam Hussein. Eagleburger has never been accused of any wrongdoing or even any knowledge of the banks' illegal practices, but Congressman Henry Gonzalez continues to pursue the theory that high officials in the Bush Administration have tried to cover up these activities. In addition, critics charge that Eagleburger's former financial connections to Yugoslav businesses made it awkward for him to become involved in U.S. policy toward the Balkans.
The breakup of Yugoslavia has been painful for Eagleburger, and a test of his philosophy. Seven of his 11 years abroad as a diplomat, four of them as ambassador under Jimmy Carter, were spent in Yugoslavia, where he earned the nickname "Larry of Macedonia." Soon after becoming Deputy Secretary in the Bush Administration in 1989, he warned that the end of the cold war could unleash ethnic hatreds in Europe, especially in Yugoslavia. He was criticized for having cold war nostalgia, but his fears have been justified. The U.S. mostly kept out of the mounting Yugoslav crisis until Baker visited Belgrade in June 1991, when the country was on the brink of dissolution. Baker and Eagleburger agreed that the federal government should be bolstered as the only force able to manage an orderly transition into freer statelets. But that government, which became a hollow creature of Serbian expansion, did nothing to stop the country's breakup.
In London last week for a conference on Yugoslavia, Eagleburger called for tighter sanctions against Serbia, more international monitoring of Serbia's borders and intensified relief efforts. He also pushed for the creation of a permanent negotiating mechanism in Geneva to slog through the messy details standing in the way of a Yugoslav settlement. All these things came to pass, and Eagleburger was pleased by the strong international unity demonstrated. But absent the use of U.S. military force, which he fears could lead to another Vietnam quagmire, none of these steps will guarantee a formula for changing Serb behavior soon, and he knows it. "To a degree I think we're in the midst of a Greek tragedy," he says, "which had a beginning, and somewhere will have an end, and a lot of people are going to die in the meantime. And it's awful."
That may be cold realism. But there are times when realism, a clear-sighted understanding of how things are, shades into fatalism, an assumption that they must stay that way. Eagleburger says he learned from Baker's Middle East diplomacy that persistence in a hopeless task can pay off. But the most interesting paradox about Eagleburger is that a man who is by nature an activist -- a lifelong problem solver who fills up a room with his presence and energy -- also insists that "there are sometimes problems," such as Yugoslavia, "for which there is no immediate solution, and there are sometimes problems for which there is no solution."